Modeling

TMM can develop a forecasting model for your retail business which can be implemented by our staff on a site by site basis. Forecasting models can also be developed for your research, finance, or real estate department to implement on an as needed basis. TMM might develop a model for your firm by conducting the following (or similar) multi-step methodology:

1. Perform Correlation Analysis. TMM and its associates would create and analyze a store database of population, demographics, business data, store sales information, competitive measurements, and distance measurements. The statistical correlation analysis would measure the relationship between each variable in the database and store sales and performance measurements. Testing all variables against an array of store performance measures, while controlling for the differences in population and business density and documenting the distances between customer and store, allows variables that significantly impact store performance to be identified. The basic premise of this approach is that the performance of new stores can be predicted based upon the documented performance of existing stores and past customer shopping behavior that operate in comparable situations.

2. Develop Models. Sales data would be analyzed against customer demographics and business data to further understand their relationships and how they might drive sales. The forecasting models may take the form of normal curves, regression or CHAID models, and/or analog comparisons at both the zip code and trade area level. The model development process is a very creative and iterative process whereby TMM staff and associates would meet regularly to refine the output. The management of your business would also be very involved in the process to provide guidance, insights, and direction.